Rate Increases Approved for California Utilities

California utilities Pacific Gas and Electric Co. and Southern California Edison Co. can breath a small sigh of relief now that the state Public Utilities Commission has tentatively approved the utilities’ request for rate increases.

The Public Utilities Commission plans to allow the utilities to increase their rates by 9 percent, a far cry from the 26 percent increase asked for by Pacific Gas and Electric and the 30 percent increase Southern California Edison requested. In addition, the increases will only be effective for 90 days.

Residential customers can expect a 9 percent increase on their electricity bills, while commercial customers can look forward to increases of 7 percent to 15 percent.

The two utilities have been driven to the brink of bankruptcy, losing more than $9 billion in recent months. Escalating wholesale prices for electricity and a state-imposed rate freeze prevents the utilities from passing the higher energy costs on to their customers.

The utilities will not have immediate access to the money generated by the rate hikes. The Public Utilities Commission will keep the money until an independent audit can be completed. If the audit shows the utilities did not need the money, it will go back to the customers.

In addition to this rate increase, both utilities see steeper rate hikes in their futures. Southern California Edison expects a total rate increase of 76 percent by 2003.